Year to date, Amarin (NASDAQ:AMRN) hasn’t been anything to write home about. Amarin stock is down 18% since Jan. 1, as compared to a 2% gain on the iShares NASDAQ Biotechnology Index ETF (NASDAQ:IBB) and the SPDR S&P Biotech ETF (NYSE:XBI). However, there’s still plenty for investors – and cardiovascular patients to get excited about.
In fact, should all go according to plan, I’d like to see the stock close to $25, near-term.
In Sept. 2019, Amarin gapped higher on news Vascepa, its omega3 fatty acid drug derived from fish oil reduced major cardiovascular (CV) events by 25% in patients already taking a statin drug, as compared to a placebo. Three months later, the FDA approved the drug.
Others have certainly tried to steal Amarin’s thunder but failed miserably.
Its drug, derived from shrimp-like crustaceans showed a 36.7% median reduction in triglyceride levels after 26 weeks of treatment, compared with an average of 28% reduction among those on placebo. While some of it was favorable, it failed to meet statistical significance. AstraZeneca (NYSE:AZN) even had to stop a large clinical trial of a fish-oil derived drug after a committee found it “was unlikely to demonstrate a benefit to patients.”
“AMRN has been the only company in its class with an outcomes study (REDUCE-IT) that has shown a statistically significant benefit in reducing [cardiovascular] disease,” Cantor Fitzgerald analyst Louise Chen noted. This “underscores our view that AMRN is an interesting asset in a consolidating space.”
Amarin Has First-Mover Advantage
At the moment, no one can touch Amarin. Competitors have so far tried and failed, allowing the company to capitalize on a $500 billion cardiovascular industry. We also have to consider cardiovascular disease is one of the biggest killers among men and women around the world.
In fact, it accounts for one out of every three deaths. Granted, millions of people use statins, but they only reduce the risk of a CV event by 25% to 35%, as reported by KGUN9 contributor Heather Rowe.
In addition, “more than 35 million people in the U.S. take statins, which are meant to lower cholesterol and therefore heart disease risk. A study in the journal Heart showed that more than half of patients on statins don’t attain healthy cholesterol levels after two years on the medication,” reports Motley Fool contributor Adria Cimino.
To help further, patients are also being prescribed dietary fish oil supplements. That’s where Amarin comes into play with a fish-oil derived drug. Such favorable news should set the stock up for monster growth, given demand.
Thanks to the US FDA, Amarin’s drug can be prescribed along with statins, giving the company access to millions of people. Better, the company predicts 2020 revenue in the range of $650 million to $700 million. Eventually, that could reach billions of dollars.
The Bottom Line on Amarin Stock
While there’s nothing to write home about just yet, I have no doubt that’ll change. There’s really no reason Amarin won’t ultimately become a big success with Vascepa. After all, the company now has access to millions of patients with no real competition.
Again, should all go according to plan, I’d like to see the stock close to $25, near-term.
As of this writing, Ian Cooper did not hold a position in any of the aforementioned securities.